Luxury Car Tax (LCT), like GST, is a retail tax that is payable by the purchaser at the time of the retail sale of a motor vehicle.

The tax is calculated on the amount of the retail price of a vehicle and its accessories, including GST, which is above $57,123. The current rate for LCT is 25%.

The Federal Treasurer, Mr Wayne Swan, announced in his Budget speech last week that the government proposes to increase the rate of LCT from the current rate of 25% to a new rate of 33% on the 1st of July 2008.

This new rate of LCT proposed by the Treasurer will effect all new and demonstrator vehicles with a retail price, including GST, in excess of $57,123 purchased from the 1st of July 2008 onwards.

The proposed effect on vehicles’ retail price will be varied and, obviously the higher the vehicle’s retail price the more the price will increase as a result of the new rate of LCT.

What does this all mean for you?

In simple terms all luxury vehicles purchased prior to the 1st of July 2008 will not be increased in price as a result of the change in LCT. Vehicles will need to be invoiced and paid for prior to July the 1st to avoid the increase in LCT.

The savings will vary for those astute enough to take advantage of the ‘window of opportunity’ and as previously stated the higher the retail price of the vehicle the greater the saving.

Please contact any of our sales staff now on 9468 8800 as stocks of some models are very limited and are running out fast!